HCL Technologies set for rejig after top brass exodus

CHENNAI/BANGALORE: Shiv Nadar's HCL Technologies is heading for a major management reshuffle, going by the talk within the company.

Rumours of its CEO Vineet Nayar quitting or moving to another position have been doing the rounds ever since he sold all his equity shares in the company on June 9. Nayar sold 27,00,000 equity shares of Rs 2 each (0.39% of total shares) to raise Rs 134 crore. Nayar later said he raised the money to fund his philanthropic activities.

Now sources within the company say some senior executives close to Nayar are quitting. The names include those of Sandip Gupta, deputy CFO, and Animesh Parihar, head of the SAP business. A source even attributed the exit of Virender Aggarwal, who headed HCL's APAC operations and who quit in April to join Ramco Systems as CEO, to Nayar's likely change in role.

None of this could be confirmed from the people concerned , and HCL declined to say anything more than: "We do not respond to rumours or speculations."

A senior official in the company, who did not want to be named, said, "Nayar is on his way out and Anant Gupta, currently president of infrastructure services, will replace him." Another source said more exits are likely. "It seems there are serious differences in the management about Nayar's vision of HCL and the road he mapped out for the company," added the source.

A leading analyst who spoke to HCL's investor relations head Sanjay Mendiratta said, "We do not see the need for a management change in the short term, but it cannot be ruled out completely. There could be softer issues between Nadar, Nayar and the HCL board that's not so visible from the outside."

Nayar's share sale has triggered a wave of speculation. Financial services firm Morgan Stanley said the share sale could be early signs of leadership transition planning . Goldman Sachs said the concerns on changes in management are largely overdone by the market and share sale for philanthropy is a common practice in the IT industry. HCL's performance in recent years has been very good, especially in comparison to some of its peers.

It had also put in place a succession plan for top 30 managers including the CEO. Nayar, who is vice-chairman and CEO, was in May given the additional designation of joint MD for a period of five years, providing visibility about his role in the firm over the medium term.

At present, Nayar holds no equity in HCL, apart from his four-million unvested Esop package worth Rs 200 crore, which is due for vesting in January 2013. Nayar joined HCL in 1985. Under him, the company's topline has moved from $700 million to $4 billion in just five years.